Q2 2023 PAVmed Inc Earnings Call
Speaker 1: Good day and welcome to the PathMed second quarter 2023 business update conference call.
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Speaker 1: I would now like to turn the conference over to Michael Parks, Vice President of Investor Relations. Please go ahead, sir.
Speaker 2: Thank you Rocco. Good morning everyone. Thank you for participating in today's second quarter 2023 business update call.
Speaker 2: The press release announced in our business update for the company and financial results for the three and six months ended June 30, 2023 is available on the PavMed website. Please take a moment to read the disclaimer about the overlooking statements.
Speaker 2: The business update press release and this conference call include forward looking statements and these forward looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from statements made. Factors that could cause actual results to differ are described in the disclaimer and in our filings with the US Securities and Exchange Commission. For a list and description of these and other important risk factors or risks and uncertainties that may affect future operations, C-PART1, Item 1A, entitled Risk Factors and PABNEDs most recent annual report on Form 10Q filed with the SEC and subsequent updates filed in quarterly reports on Form 10Q and any subsequent form 8K file. As required by law, PABNEDs exclaims any intentions or obligations to public the update or revise any forward looking statements to reflect changes in expectations or in events, conditions or circumstances on which the expectations may affect the likelihood that actual results will differ from those contained before looking statements. I would now like to turn the call over to Dr. Alicia on Acklog, PABNED, Chairman of CEO . Dr. Acklog. Thank you, Mike, and good morning everyone. Great to have you here. Thank you for taking the time to join us.
Speaker 3: Spent the time catching you up on the business side of things for various and Lucid. As you know, we did do a poll, Lucid called yesterday and that called us on our website. As all limits might put the topics of Lucid and focus more on various. But let's start with some recent highlights. On the various side, the various cancer care platform is impacting care at early adopter practices. I'll give an example of how having that impact. We have a next generation accelerating patient enrollment and revenue from subscriptions in the second half. We've got a two new strategic initiatives since the arrival. One is that we are building.
Speaker 3: a module for the platform that focuses up by a pharma and will serve as a companion visual platform to novel cancer if there are few more of that later. We're also upgrading the platform to serve as a software as a medical device with planned FDA submission in 2024, which will allow us to expand its functionality into clinical full more clinical physician support.
Speaker 3: The Implanable Monitor, post-portional road project, is progressive while that's heading towards FDA for mission and commercial lines in 2024. Again, more details in the webinar from yesterday, but some highlights from the lucid side of things. At quarterly test line, growth grew 20%. Quarterm quarter, we updated our Reggae and Cycle Management.
Speaker 3: Infrastructure and provider, as we had already yesterday, that's already had an immediate impact on both claims and payments and revenue in the first six weeks since you made that transition and really feel like we're out at a flexion point, with regard to translating test volume growth into revenue.
Speaker 3: We have two prospective clinical utility studies, at least that person in all the milestone, I will be submitted for publication soon. We highlighted unprecedented results from the NCI-funded eSugart study that was released recently, and highlighted that we...
Speaker 3: executed their first direct employer contract which offers use of
Speaker 3: Let me just step back and have a couple of slides with an introduction to those of your national matter with the Padmet story. Padmet is a diversified commercial stage medical technology company we operate in all pre-sectors, the devices, diagnostics and visual health.
Speaker 3: Our corporate structure is that we have two majority-owned subsidiaries that as of the beginning of this year represent the entirety of the focus of our business. Varysel, privately held digital health company with a cancer care platform and a smart desk report.
Speaker 3: And of course, Lucid Diagnostic, that probably was the math of that company, which is what was done the only detection of the soft and short pre-camp.
Speaker 3: of course, it's a diagnostics, that probably will send that company, which is what is done to go with detection of the soft and short pre-catch. So again, let's start with theirs.
Speaker 3: So Varys is a commercial stage. There's a health company. It's what we're focused on, enhancing personalized cancer care. There are two components. One which is actively commercialized, and one which we expect to commercialize in next year. The cancer is a platform because of the patient.
Speaker 3: smartphone module as well as a thick.
Speaker 3: clinician portal that's married to a bearer's box of branded
Speaker 3: devices to the treatment, physiologic data upon the patient to the physician.
Speaker 3: The mission is to utilize the remote patient monitoring tools to improve care through the detection of complications and establishing longitudinal trends and risk management.
Speaker 3: The business model is a software that service required revenue model. We have established RPM codes, so this is not a significant reimbursement hurdle for us. There are also additional revenue opportunities for enhanced technical support, clinical support, and when the implant will be designed to become available.
Speaker 3: We seek to leverage certain value-based models, particularly ones that are focused on oncology, like the enhancing or college model, or EOM. So on the commercial execution side, we have several early adopters. These are generally small to medium practices that are on the platform and putting patients on the platform. Our focus in the last quarter has been with customer integration support.
Speaker 3: streamlining, making more efficient the processes for the practices to integrate this within their operations within their electronic health record and all of that's going quite well. We have received positive feedback and use some of that feedback.
Speaker 3: to incorporate features into our next generation platform, which is actively under development right now, and will launch by the early.
Speaker 3: part of the fourth order. We are restructuring and expanding our commercial team, Gary Manning again has taken the lead on that, and we look to...
Speaker 3: to do so in the second half of the year to drive commercial expansion and revenue from subscriptions.
Speaker 3: That's the best way, as I did yesterday, to lose it to describe how the system works and that it's real and that it's having an impact on...
Speaker 3: Cancer care, I thought I'd highlight one particular example that shows that that remote patient monitoring can prevent the adverse outcomes in the same way.
Speaker 3: So there's a patient's Dave, he's a 71 year old male, unfortunately, who's diagnosed with biodex cancer. He's undergoing aggressive systemic treatments, added various clients and oncology practice in Southeast Pennsylvania.
Speaker 3: He was selected to be enrolled on the various platform, given that he had a high risk problem.
Speaker 3: So he received, as you can see on the right there, the box with the Bluetooth connected monitoring devices and the platform loaded on his smartphone.
Speaker 3: So, Willie, we see the various platform as a sensible, as a warning system that allows the patient.
Speaker 3: to highlight abnormalities, either through their symptom of boarding or through the geologic changes that are detected on the devices. So the patient self-reported that has belly hurt. You can see how he would do that on the...
Speaker 3: on the right there on one of the screens that has quite sophisticated symptom reporting that has you rated time period just like a position or a nurse would ask you.
Speaker 3: The next day, the nurse noted on the platform, you can see the example there, what this is actually from the actual patient. She noted that he reported a symptom that's the bottom, a little bit circle there that shows that he reported symptoms of belly pain and he rated it as two. As modern Lisa here.
Speaker 3: She also noticed that the heart rate and the oxygen saturation were changing in a way that was concerning to her. You can see the green lines, the heart rate going up.
Speaker 3: green lines for the oxygen saturation going down. So given those triggers, she contacted the patient through the tele.
Speaker 3: Helmetis important that's built into our system. She assessed the patient, called that it wasn't an imminent emergency, but that this was potentially heading in a serious direction and educated the patient on the next step, including what the thresholds would be in terms of symptom progression that would necessitate him having to be emergency room.
Speaker 3: based on that assessment and that education, the patient symptoms did rapidly progress later in the day and he was admitted to the hospital via emergency.
Speaker 3: His diagnosis was an acute bowel obstruction, but fortunately, it was early enough in the process that it could be treated with a non-surgical stent and he had a short stay in the hospital and was discharged. So really, this is a classic example of how the platform in hand would care. The early warning and intervention of a potential, of a actual complication in these high risk cancer patients.
Speaker 3: work flawlessly and it prevented very likely progression to perforation high risk emergency surgery and potentially death. And it also prevented any delay in cancer therapy. The cancer therapy is required surgery then all treatment would have been halted until he had healed from the surgery.
Speaker 3: We also have very solid documentation that this is a good example of how it drives out based on the ERG codes of hospital expenditures estimated that the hospital of the system, the payers saved between $10,000 and $24,000 by getting the early early notification of this complication.
Speaker 3: Also, the infusion therapies of the treatment have been significantly the major in the source of income for the practices, and there was no loss of that practice income for me.
Speaker 3: for the physicians and also these value-based programs that I mentioned like EOM, they depend on preventing complications, preventing hospitalizations, shortening stays and hospitalizations to recurse. And clearly, this had an impact on that and would have been a valuable contributor to the EOM calculations.
Speaker 3: companion digital platform. And the idea here is to expand the various platform to include a module that focuses on bi-form a therapeutic, so it will target bi-form a company that are developing novel cancer therapeutics and provide them with a long-term patient monitoring solution.
Speaker 3: There would be an analogy here, something that is quite common and has become common over the last decade and a half, which are companion diagnostics. So where a therapeutic drug or biologic is linked to a diagnostic test, both during the development as well as during regulatory clearance, and they become extremely linked for the long term. If the opportunity here includes providing support for clinical trials and post-marketing surveillance,
Speaker 3: enhancing safety by reducing adverse events. So it's useful for the companies to be able to complete their trials with monitoring to prevent complications, just like the complications that we saw in the previous example of the patient. That will lead to expedited regulatory filings, lower regulatory hurdles, more likely clearance with expectations that FDA would.
Speaker 3: clear these therapeutics contingent on the patient being monitored as they work during the trial.
Speaker 3: that has the opportunity to be to market and commercial expansion. And we see these as long term commercial partnerships with the bi-form companies. And a entirely different and new source of revenue and entirely different business.
Speaker 3: The other important strategic initiative that we're getting started on this quarter is our transition from the various platform to a software development device. So the FDA categorizes software used in healthcare into two primary ways right now.
Speaker 3: The rare spot for it was considered a medical device data system. So all it does is it plays medical data for the clinicians to see if we're getting to solve it. The example where the nurse saw the heart rate and the oxygen saturation, but we did not, we did not, and we alertly we provided a sense that it was high based on color coding and based on thresholds that the clinical.
Speaker 3: under this lower regulatory hurdle. For something to be a software as a medical device, and it's intended to use, it's actually for diagnosing and treating patients, and it provides additional clinical, active clinical support or decision-making.
Speaker 3: So we've decided that we're going to launch a program to upgrade the various platform form and MDDS to FDA-queer software and medical device. And what will happen after establishing that foundation is it will provide us with unlimited potential to grow the platform into a full-bore clinical decision support tool. So instead of simply displaying medical data,
Speaker 3: core clinicians, which of course is valuable, and we've seen that already, we'll be able to provide more sophisticated threshold alarms, alerts, heuristic algorithms to provide effective triage so the patients at the top of the list will be one that has been calculated to be at greatest risk for having complications, based on various algorithms, and a whole blue ocean.
Speaker 3: area called digital biomarkers where AI and machine learning models are used for patients pro-pilot. So those are all exciting horizons that we're looking forward to growing into. And in order to do that, we have to make the transition for the software as a medical device. So the key steps initial steps are we are incorporating key features into next-generation product that'll allow us
Speaker 3: Final update on the implantable monitor. If you recall, this is to extend the power of the platform and assure 100% compliance with remote patient monitoring billing requirements. Just as a reminder, with the remote patient monitoring codes in order for the physician and the practice to dole for it, the patient has to actively measure various parameters, weight, blood pressure, oxins, et cetera, at least 16 days a month. With the implantable device that'll guarantee that it does not depend on the patient compliance or 100% compliance with that RPM billing threshold.
Speaker 3: So this consists of an implant and implantable modator you can see on the bottom right there as a stand-alone bonneter and it has the OO divina that which allows a existing off-the-shelf chemo port that's the purple.
Speaker 3: purple out of there to kind of snap in and allows them to be implemented at the same time to concur with the initiation of chemotherapy. And while I will have a variety of features and a measure continuous cardiac monitoring activity that will have an event monitor where the patient can say I'm having some symptom that could be correlated to the physiologic parameters.
Speaker 3: temperature and respiratory rate and as the whole blue tube can have activity for their smart phone. And we've had multiple successful FDA pre-submission meetings that seek feedback on various design features that have occurred over the last couple of quarters. That's all going very well. As is the actual development work with our two manufacturing and RD engineering partners.
Speaker 3: commercial launch next year. So that's it with Barris just two real quick slides to highlight some of the key points that an accomplishment that we want to spend more time timing the more detail yesterday. Again, we show very nice, Betty double-digit, quarter-on-quarter growth, speaking of recovery.
Speaker 3: and a significant portion of them continuing to be the high volume testing events at firefighter department in elsewhere. Also just wanted to highlight the results of the better net study. This is a study that was a well-cooked result for recent release. It's a consortium of academic medical centers leading academic medical centers in the area of the South of Jil disease funded by the National Cancer Institute. The results have been posted on a pre-prote server and is available on PubMed and has been submitted for peer reviews into the American Journal of Gastroenterology. The result demonstrated that Iso Guard when compared to Copicol standard of endoscopy.
Speaker 3: detected 100% of the cancers, 180% of pre-cancers, and 85% overall with an estimated negative predictor value of 99%, which is the threshold that you need in order to be effective test to make sure that you're not missing any.
Speaker 3: any positive patients. Highly these results relative to results of other early cancer detection targets not really suggested as they had to have comparison directly, but to really highlight what the standards are for these other successful or imminent tests.
Speaker 3: that are getting a lot of attention. And what those targets, what the target performance is for us, relative to what they are for, they happen for these other successful.
Speaker 3: test. And so as you can see at 100% cancer detection, we are well in the range and above, I frankly, where cologard is, even when the newer reported results, the colorectal blood test from Cartooned, substantially lower than that, but still deemed to be...
Speaker 3: sufficient for it to achieve FDA clearance as well as payment for Medicare. Although the important highlight of that is that that 83 percent number is heavily dominated by later stage cancers and the rate for stage one cancer is quite poor at 55 percent. I'll note that all of the cancers in the better net study that isigart picked up were all stage one cancers.
Speaker 3: The most striking difference is Isiguard's ability, really this is where we describe this as unprecedented, its ability to detect pre-cancer. So Cologuard does just under 50% of the blood tests, have essentially no meaningful ability to detect pre-cancer, while Isiguard is doing so at the greater than 80% range. Now for colorectal cancer, that can be reasonable in that stage one cancer is curable, but for esophageal cancer, we don't have an option. We actually have to pick up pre-cancer because the mortality rate for stage one cancer.
Speaker 3: in the esophagus is very, very high. So I'll leave it at that and hand over the baton to Dennis. Thank you, Leeshan. We are at summary financial results for the second quarter and first half of the year reported on our press release that was published last night. On the next three slides, I'll emphasize a few key highlights from the quarter, but I encourage you to consider those remarks in the context.
Speaker 3: The full disclosure is covered in our quarterly report on Form 10Q that was filed with ESCC on Monday afternoon and is available on the PATVED website.
Speaker 3: Slide 17 is our balance sheet comparison. It demonstrates cash of $37.2 million, which reflects a sequential burn rate of $12.1 million.
Speaker 3: This represents a $2 million improvement over the first quarter and a $5 million quarterly improvement over the fourth quarter of last year.
Speaker 3: These improvements are related to the cost control initiatives we put in place at the beginning of the year.
Speaker 3: Obviously, that cash balance does not reflect the remaining $10 million draw available to us under the Securities Purchase Agreement that was signed in March of 2022, nor other resources available to us at both the PASMED and Lucid entity levels.
Speaker 3: on a pro forma basis including the remainder of the securities purchase agreement and assuming the net burn rate is sustained at this level our runway is about a year.
Speaker 4: Furthermore, as cash collections continue to accelerate, as we'll talk about,
Speaker 4: continue to accelerate as we'll talk about in a second.
Speaker 4: This can further throttle the burn rate for the upcoming coolers.
Speaker 4: Vendor payables are flat sequentially.
Speaker 4: Other current liabilities show an increase of 1.6 million. The largest increase here is our annual renewals of our insurances, and they get paid over the next year.
Speaker 4: increase of 1.6 million. The largest increase here is our annual renewals of our insurances, and they get paid over the next year. The convertible note.
Speaker 4: A net sequential decrease of approximately 1.3 million is largely related to debt repayments via conversions to common stock during the quarter.
Speaker 4: and other long-term liabilities are from capitalized leases related to our lab and other office spaces.
Speaker 4: Shares outstanding including unvested restricted stock rewards as of today. 111.4 million shares.
Speaker 4: The GAAP outstanding shares of $108.5 million are reflected on the slide as well as on the face of the balance sheet.
Speaker 4: 108.5 million are reflected on the slide as well as on the face of the balance sheet in the 10Q.
Speaker 4: So on the next slide, slide 18 compares this year's second quarter to last year's second quarter, and similarly for the six-month totals on certain key items. I trust you'll review the information in my comments in light of the cautionary disclosure in the bottom of the slide about supplemental information, particularly non-GAAP information.
Speaker 4: The SEC makes sure I say that. Revenue for the second quarter largely reflects lucid actual cash collections for the quarter for insurance reimbursable claims plus invoice e-cigar tests from the Veterans Administration.
Speaker 4: plus initial billings for the virus cancer care platform. As detailed in our Lucid quarter we called yesterday, we highlighted the discussion that began on our first quarter call in May regarding the major change and upgrade we made to Lucid's revenue cycle management company.
Speaker 4: We determined that the best way to manage that transition was to stop submitting claims for reimbursement at the beginning of May to allow for Quad-X, the RCM.
Speaker 4: to come on board, which they did in mid-June, and more effectively handle processing and reporting of the claims we had in hand.
Speaker 4: So far, in just a short period of time since the beginning of third quarter, July 1st coming out.
Speaker 4: Collections from the third party reimbursement claims have tripled what was collected in the entire previous quarter.
Speaker 4: The second quarter of Verus revenue reflects the initial payments, equivalent to about 90 patient months.
Speaker 4: put on the platform for each of the first two onboarded cancer care centers, storing the initial customer acceptance processes that included validation, customization, integration with the respective EHR systems, generally a heavily controlled and very intense pressure testing of the platform as it relates to
Speaker 4: clinicians relying upon the various platform information, the speed of connecting patients and clinicians, the ability to effectively communicate with an update to the client's electronic health records and other patient care related.
Speaker 4: systems. Obviously the platform is performing as intended as it is always generating patient case reports that demonstrate life-saving capabilities through remote patient monitoring is leash on detail that has prepared remarks.
Speaker 4: So with regard to the prior year revenue as we look at the next slide.
Speaker 4: You will recall that there was a fixed monthly fee received from a third party lab that we used before setting up our own lab.
Speaker 4: And that agreement terminated in February of 22.
Speaker 4: Lucid's revenue recognition.
Speaker 5: a key determinant.
Speaker 4: is the probability of collection. Therefore, due to the fact that we are in the early stages of our reimbursement process means revenue recognition occurs when the claim is actually collected. First, when the patient report is invoiced and submitted for reimbursement.
As for the Verus revenue, we expect to continue to recognize revenue on an as-incurred and as-invoiced basis, subject to normal GAAP rules. Couple comments on GAAP and non-GAAP , OPEX as well as net loss. The presentation shows year-over-year comparisons, but I'm going to highlight some sequential changes which are more indicative of where we're heading for the balance of the year. Our second quarter GAAP OPEX and GAAP loss is lower sequentially by more than $4 million each, reflecting a 20% decrease.
sequentially for each measure. Our second quarter non-GAAP optics is lower sequentially by 2.3 million and 4.8 million from the fourth quarter, 15 and 27 percent reduction sequentially. This reflects the impact of the cost controls we initiated at the beginning of the year. Our second quarter non-GAAP loss per share is nine cents, a decrease of about a penny from the first quarter and an improvement from a loss of around 15 cents in the fourth quarter. Slide 19 is a graphic illustration of our operating expenses as they're presented in detail in our press release.
The second quarter sequential decrease was led by approximately a 1.5 million dollar decrease in G&A and a 1 million dollar decrease in R&D. Sales and marketing expense was relatively flat and the relatively small cost of revenue increases largely attributed to increase in the test volume for the quarter.
Costs of revenue primarily consist of lucid lab supplies and fixed lab costs with a much smaller amount attributed to the delivery cost for the with a much smaller amount attributed to the delivery cost for the better self-cancer care platform.
So I'm going to give you a few more stats that we shared.
yesterday on our call related to the improvements that we're realizing on the Revenue Cycle Management Company.
Just since they took over on May 1st.
on board its claims beginning the middle of June . From May 1st to August 14th, including all the backlog that existed until they came on board, they submitted claims of over 2,000, 2,100 claims. Of those claims, just under half have been adjudicated by the insurance companies already, 943 claims. That resulted in an allowed amount, essentially an affirmation of the payment obligation.
of 349 of them, 37% of them. The telling in that is the allowed amount came in at $1,890, essentially validating our payment rate established by Medicare. So we're seeing speed of submitting claims, we're seeing speed of adjudication, we're seeing speed in terms of the allowable claims and the allowable claims at a significantly higher rate than what we've even reported in our previous course.
Whether that 37% success rate continues or continues to improve.
Quad-X, the new RCM manager, is demonstrating significant efficacy as well as data reporting that's actionable, including those that are adjudicated and initially denied, putting them into their appeals process, which they are just revving up now.
They have about 200 appeals of this group in their process, which the number one reason for denial is medically not necessary. We know the two society guidelines establish the risk factors and these patients only get a test if they meet those risk factors.
So we believe that appeals process will be helpful in two dimensions. One, collecting more money, and two, becoming such an annoyance to the Chief Medical Officer that will raise their level of attention and therefore, similar to other contracts we entered, move towards in-network as part of our two-fold clinical utility data plus claims history.
driving improvement in the reimbursement process. So with that operator let's open it up for questions.
Thank you. We will now begin the question and answer session. To ask a question you may press star then one on your telephone keypad. If you are using the speakerphone we ask that you please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question please press star then two. Today's first question comes from Frank Tockenen with Lake Street Capital Markets. Please go ahead. Good morning Frank. Hi Frank. Hey good morning LeShawn, Dennis. Thanks for taking the questions. Congrats on the progress. I'll start with one on the BioPharma cancer care platform that you guys spent a fair amount of time talking about today. I don't think I heard you guys talk about a timeline on that but maybe walk through one we could see that develop.
as a strategic goal for some time in the future. And with Gary coming on board, it's given us the opportunity to do a deeper dive. And we realize that we have the opportunity to do two things that were different than before. One is to move the timelines much, much quicker than I had expected. And two, to extend the value of the proposition, not just for clinical trial support, but extending it as a full companion.
technology to the diagnostics. So we are just scoping out, so the reason why it's going to turn, well just to backtrack a sec, the reason why the timelines are going to be are significantly shorter than I have than we had originally planned is that it's clear that we could add it just simply as a module on top of our existing platform.
So it doesn't require a bottoms up sort of entirely new structure. Once that became clear in consultation with our really outstanding software development partner in HILOCA, that process has started. We're scoping out the project to figure out what how much, you know, what the design structure will be. But since it'll be a module within a...
but we're talking on the order of months or quarters, not years. Perfect, that's helpful. And then maybe just to stay on that topic, could you talk about what a business model could look like there once you start to sign partnerships with bio pharma companies? Yeah, I mean this is entirely different, right? So here are the values...
for example, is a million dollars per patient treatment.
but also do so after clearance in the market is significant. And so we expect that the business model there will be to capture as a service arrangement with the pharma company for the services provided during the development of the, during the clinical trial, during the development and clinical research phase. And then some additional structure around how the platform will be utilized in conjunction with the drug on more of a subscription basis, but all very much tightly tied with the, with the partner pharmaceutical company.
end of the month. I believe that checks the last primary box that CMS presented to you related to guidelines, utility, and validity. So with that, I assume that you can push forward that CMS establishment, finalization of that establishment pretty quickly, and then maybe just extend that thought into private pairs, too, and then we can start to see those come on based on this utility data. Yeah, I'm going to kind of reverse your question. On the private side, it's very straightforward because it's each individual pair and our ability to have sort of less structured conversations with regard to the sufficiency of the data, the results of the data, what additional data it might need.
etc., can literally start from the time that they're posted on the preprint server even prior to peer review. And so that's great. And with the proportion of our patients being over 80% commercial pay, we see really immediate opportunities to have an impact on coverage.
And our next question today comes from Ed Wu with the Cindy and Capital. Please go ahead. Yeah, congratulations on the progress you made.
My question is on the various sales force. You said you guys are restructuring and expanding it. Is there a target size for the sales force and in terms of geography, are you guys having a nationwide reach or is there a focus on a certain region of the country?
So we are not focusing on individual regions. We have initially focused on smaller practices where the hurdles in terms of infrastructure, IT infrastructure, integration, so forth are lower, although we are having active discussions with several large academic cancer medical centers. We're going to start small and build as we go. So the current plan is for two sellers. We're actively interviewing for those for the second half of this year. And then we will increase that as we go, as we get traction.
So two sellers plus Gary for this quarter, and then we'll look to expand for the next year. Great, and then as you guys start to focus on this BioPharma program, will it require a different type of sales force, or can you use your existing salespeople to try to go into that market? Yeah, another great question.
My sense is that'll be somewhat different, but very similar to, let's say, like on the lucid side, the difference between sort of the in the trenches of the
on primary care practices and specialists and so forth, and then those that focus more on strategic accounts. So this would be more along those lines. And frankly, at the beginning, much of that will happen at the most senior level with Gary being the primary person to interface with the biopharm companies around this opportunity. Great, well thanks for answering my question.
Please go ahead. Hey Russ, good morning everyone. Thanks for taking our questions.
So regarding commercialization embarrass. Has New Jersey cancer care expanded the use outside of the initial group of patients and, as a follow-up, given this was launched in February , can provided average use time per month in order for us to better understand the revenue potential?
Okay, well, let's break that down. So, they are adding patients to their platform as I sort of hinted in the...
patient example, even though that wasn't from their group. The general approach has been to identify cohort of the highest risk patients to bring on the system first. And then as I've sort of said, we're focusing, we've been focused the last couple of quarters on making sure that,
Along and running on all cylinders and we've been really focusing our resources on that at the sites that we currently have and that's that's working well as I said there's been some and some feedback that we're incorporating into the next generation device but that's that's working well with regard to compliance our compliance is you know even though we sort of point out that the implantable platform
Let me know. No, that's perfect. Thank you. And then just a quick second question. You know, ahead of the next generation launch, can you talk about how you are marketing that offering maybe to larger practices or institutions? How we are marketing the implantable device? Yes. Oh, the Gen 2 version of the software platform. Sorry, I just want to make sure I'm talking about the right product. Well, both would be great if you can. Okay, sure. So the next generation software platform is really just incremental improvement.
that reflect the feedback that we've received from practices. So that'll just be sort of a smooth upgrade of a new generation device. We're not marketing that, frankly, any differently. The implantable device won't be available for next year. We don't have a hard day to provide you yet. There's still some feedback back and forth with FDA, as well as some other new generation devices. So we're going to be talking about the new generation devices that are available.
timing related elements with our contract manufacturing vendors. But once we do launch that we haven't really articulated our full externally our full marketing plan. There's still some variables that we have to kind of decide with regard to are we going to charge for the device, how much are we going to charge, are we going to charge a premium relative to existing.
that will serve well and this will be a new 510k for the software as a medical device.
And the steps required to do so are all the usual validation steps that's required for software. Does that make sense? Yeah, sure. No that makes sense. And do you think, you know, based on the comments, did you say you would probably be looking to submit that in the beginning of 24?
testing. So this is a new initiative. We'll have some pre-subs with FDA to make sure that we have the validation plan and the predicates and so forth well aligned. So I would just say it depends what we do next year as a target that that's subject to, to our interactions with FDA. Okay, and and obviously, you pointed to some examples of CAR-T being one, but but what the, you know, potential uses of this would be in terms of monitoring the patient. And then and then also making it as a companion diagnostic with other therapies, whether they're current ones or new ones being developed.
When you put that all together, have you come up with an approximate TAM? What do you think the total addressable market could be? Yeah. Let me just answer the qualitative question first. There really should be no limitation with regard to the scope of cancer therapeutics that would be applicable here, right? Because you know...
essentially every therapy that you're offering, whether it's immunotherapy, chemotherapy, oral, IV infusions, they're all associated with meaningful complication rates that theoretically could be mitigated by more intense monitoring. So, we don't really see any limitation with regard to that.
a proprietary drug that can garner a premium. We haven't really explored that in detail, but there's certainly, that would be part of the opportunity and in terms of a numerical, Pam, I look at, you know, it's obviously, you know, very, very large because the, even if you take a small, low single digit percentage that can be attributable of the, of the,
Yeah, no, I agree with that. So maybe just lastly, remote monitoring, it's not a new idea. Your device may very well be. But in terms of what you see currently in terms of competition, what would be the, do you believe, the closest competitor to the Verus platform? Yeah, I won't call out individual companies, but there are companies out there that are doing generic remote patient monitoring. There's really no sort of hurdle or barrier to entry for that. There are some that are digital platforms that are focused on cancer. There's one that's combining the two.
In a way, in a limited way, but none of them are doing so in as tightly linked a fashion as we are. And once we launch the implantable device which has intellectual property associated with it, that will be a meaningful barrier to entry. So
Most of what we see out there is somewhat generic, somewhat focused on patient engagement as opposed to having a clinician platform that is designed to be highly sort of efficient and integrated with clinical practice. Our platform is designed by a radiation oncologist, taking the lead on that and the feedback that we've gotten.
from the practices that we've called on, it's been very, very positive with regard to how it can, how it integrates within the practice of an oncologist. But once we have the implantable, that will be a meaningful piece of information.
the practices that we've called on, it's been very, very positive with regard to how it can, how it integrates within the practice of an oncologist. But once we have the implantable, that will be a meaningful barrier for others, and obviously the value added from that.
people will be. Okay great, very helpful. Thanks so much. Appreciate it. I'll hop back into the chair. Great, thank you. Thank you and ladies and gentlemen this concludes our question and answer session. I'd like to turn the conference back over to management for any closing remarks.
Great, so I'd like to thank all of you for your attention and for spending time with us this morning and for all the excellent questions and discussion. I'd encourage you to keep in touch with us like contacting Michael Parks at MEP at padmet.com with any questions or comments and following us on social media.
So thank you very much and look forward to a good day.